CEE MARKETS-Currencies firm, forint regains some of its losses as dollar slides
By Anita Komuves
BUDAPEST, Aug 28 (Reuters) - Most Central European currencies firmed and the forint recouped some of its recent losses on Friday as the dollar slid after U.S. Federal Reserve chairman Jerome Powell announced a policy shift on inflation.
The Hungarian forint EURHUF= weakened for two weeks and touched two-month lows in the previous session. On Friday it edged up 0.17% to trade at 355.88 per euro.
"Based on the technical picture I expect a correction in the EUR/HUF exchange rate which could firm back as far as 352.5," an FX trader in Budapest said.
"Macroeconomic data spoiled investors' mood lately but those numbers will get better in the next quarter. A lot will depend on the September inflation report of the central bank."
The currency broke away from its regional peers in mid-August as it came under pressure from dismal Hungarian GDP data, high inflation and loose monetary policy.
Inflation came in at a higher-than-expected annual 3.8% in July and GDP dropped by 13.6% year-on-year in Q2.
The Romanian leu EURRON= was little moved and trading at 4.8395 per euro ahead of a vote of no confidence against the government of Ludovic Orban on Monday.
The vote adds to years of political instability that have kept the currency under pressure.
"If the vote of no confidence was going to be successful this might put pressure on the leu, at least short term," Commerzbank said in a note.
"In this case Orban’s government will continue governing until the parliamentary elections in December, and as a result the effects on the leu are likely to be limited."
Elsewhere, the Czech crown EURCZK= firmed 0.1% and was trading at 26.260 versus the common currency. The Polish zloty EURPLN= firmed 0.17% to 4.4059 per euro.
Stocks in the region were mixed, with Prague's equities .PX up 0.25% and Budapest .BUX sliding 0.91%. Warsaw's index .WIG20 was down 0.28% while Bucharest's stock market .BETI edged up 0.03%.
AT 1052 CET
Note: daily change
Note: FRA quotes
are for ask prices
(Additional reporting by Jason Hovet in Prague. Editing by Carmel Crimmins)
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